While considering a possible shift into cloud technology, many people turn to online groups and forums for advice. I experienced this firsthand and noticed how many vendors are quick to promote their products, yet fail to answer the real questions at hand. After noticing a blog post asking for recommendations on the considerations when moving into a hosting environment, I comprised a list with the following suggestions:

1.  Evaluate the providers using data centers that, at minimum, maintain standards for SSAE 16 certification. The best practice would also include ISO27001 registration (security protocols).
2.  Procuring hardware can span the spectrum from a renting space to a fully managed hosting environment. The term, “Private Cloud” points to a dedicated infrastructure on a company-specific basis. Determine which model is appropriate and ask yourself: “Who supports the hardware?  What is – and is not – included in that support?”
3.  You’ll often need to decipher imprecise jargon and complex terms beforehand. Is your vendor providing a lease on the dedicated infrastructure? If so, is the hardware refreshed regularly or simply a cash flow exercise to avoid a CapEx expense? Are there any applicable financial benefits?
4.  Determine the ROI. Simply moving to the cloud does not necessarily mean significant monetization. A strategic move to outsource system administration functions may be more cost-effective. Consider your core competencies as an organization and the added benefits: 24x7 support, heightened security protocols, improved customer perception, etc.  Ask yourself how relevant these types of criteria are to your business success. 
5. Consider the idea of outsourcing IT systems combined with a longer-term strategy of replacement/upgrades to business systems that deliver the solution as a cloud service (infrastructure such as Microsoft Azure or equivalent, productivity software such as Microsoft Office 365, telecom such as hosted VoIP, etc.). You are most likely using outsourced payroll providers, so this is not necessarily your first entry into the cloud.  The idea of SaaS is to serve as an enabler of the cost savings “the cloud” portends. Selecting a SaaS solution simply because it is “in the cloud,” may in fact be a poor decision. The key when adding business applications is to focus on vendors that have deep industry expertise and functions that cater to your exacting processes. If you don’t, the savings you anticipate from cloudsourcing will quickly diminish when trying to bend the application to fit your needs. Worse, you may be switching SaaS solutions before you know it. Churn in the SaaS world is greater than most businesses imagine.
6.  Lastly, do your due diligence on the Service Level Agreements (SLA). Obtain professional guidance if you need professional help in understanding best practices. It is just as important to have a good business document as it is to have good technology support.

By Michael Chadwick, Tensoft – ERP Solutions for the Software, Technology and Semiconductor Industries